The report of the International Aluminum Association (IAI) yesterday (March 1) showed that producers’ aluminum inventories increased by 65,000 tons in January, which was an increase after the increase of 111,000 tons in December, far more than offsetting other reports inventories. The drop in two months. On the surface this is a trend that seems to be worrisome. However, we still believe that the supply and demand situation of aluminum is bullish. There are two main reasons for the increase in inventories: Seasonal demand conditions (and therefore As a result of the increase in manufacturers’ inventory, China’s aluminum exports have increased rapidly before export taxation in 2004. Reported types of aluminum inventories???????????????????? ??????????? Stock Exchange Total Inventory International Aluminum Association Inventory Japan Port Inventory Total Report Stock Kt (000t) 04 January 1696 1685 279 3659 February 04 1646 1590 291 3527 04 Month 1493 1558 294 3345 04 April 1418 1547 282 3246 May 04 1310 1739 265 3314 June 1188 1960 1640 233 3061 July 1135 1667 247 3049 August 04 999 1710 290 2 999 04 September 870 1658 309 2837 04 October 885 1701 269 2855 04 November 878 1677 305 2860 04 December 816 1788 329 2933 05 January 1783 1853 359 2994 February 2005 769 1828 389 2986 Stock Change (000t) 04 January 32 56 -24 63 04 February -49 -95 13 -132 04 March -153 -32 3 -182 April 04 -75 -11 -13 -99 Year 04 5 Month -108 192 -17 67 04 June -122 -99 -32 -253 04 July - 53 27 14 -12 04 August -135 43 43 -49 September 04 -130 -52 19 -162 October 04 43 -40 18 04 November -7 -24 36 5 04 December - 62 111 24 73 January 05 -33 65 30 61 February 2005 -14 -25 30 -9 ?? ????????????????????????????? Source: LME, Comex/Nymex, SHFE, Industry News, Macquarie Research December 2004 and Almost total in January 2005 There will be a significant increase in producer stocks. This is because producers continue to operate 24 hours a day, seven days a week throughout the year, while consumption in December and January due to seasonal reasons some consumers stop working, the demand for construction industry is The northern hemisphere also has a sluggish season. Demand during this time has also been slow due to vacations in the region during the Chinese New Year period. In recent years, producers’ inventory has tended to increase by about 100,000 tons in December. , In January, an increase of 50,000 tons, so the increase in the inventory reported by the International Aluminium Association has remained orderly in the past two months. It is noteworthy that despite the rapid rise in China’s aluminum exports, Japan’s inventory formation (reported data ) and other parts of Asia (according to legendary reports), the spot market still seems very tight supply. The spot premium is still stable in all regions, there is still a strong demand for LME stocks in Europe as business people continue to Transfer to North America to supply the extremely tight market. The premium for spot aluminum is still strong, especially in North America. We expect to see a slight drop in Asian spot premiums in the short-term as Chinese metals are more in the region, but as Chinese exports slow, these inventory pressures will ease. We are worried that any spot premiums are showing signs of weakness in the North American and European spot markets? But there is no signal at this time. At the same time, we should treat the AAL's February and March producer inventory data as a key indicator of whether the market really supplies tension. Manufacturers' inventory should decline during this period, it is from a normal seasonal state. If the manufacturer's inventory falls by no more than 75,000 tons in February and March together, we will feel uneasy about the market because the supply is not as tight as we believe.